Ferguson v. Gill , 81 N.Y. Sup. Ct. 566 ( 1893 )

O’BRIEN, J.

This action was brought to enforce a liability against defendant for certain debts of a corporation organized under the manufacturing act, (Laws 1848,) on the ground that he, being a trustee of that company, joined in the making and filing of a false certificate that the capital stock of the company had been paid in. The trial resulted in a verdict for the defendant, and thereupon the plaintiffs moved the trial court, on the minutes, to set aside the verdict and grant a new trial, on the ground that it was against the evidence, and on the ground of rulings made upon the trial, and upon all the grounds mentioned in section 999 of the Code of Civil Procedure. The motion was granted, and it is from the order granting such motion that the defendant appeals.

In the memorandum filed by the learned judge, he says, “I am of the opinion that the verdict rendered by the jury was contrary to the evidence.” The liability sought to be enforced was predicated upon the fifteenth section of the manufacturing act of 1848, which reads as follows:

“If any certificate or report made or public notice given by the officers of any such company in pursuance of the provisions of this act should be false in any material representation, all the officers who shall have signed the same knowing it to be false shall be jointly and severally liable for all the debts of the company contracted while they are stockholders or officers thereof.”

It will thus be seen that the burden was placed upon the plaintiffs of establishing two things: First, that the certificate filed was, in point of fact, false; and, second, that with knowledge of its falsity, the defendant signed it. Upon an examination of the evidence, we think that a preponderance thereof inclined to the view that the burden upon the first question, as to the certificate being false in point of fact, was sustained.

Upon the second question, as to whether the defendant knowingly signed it, there was an undoubted conflict of evidence, and neither side took exception to the presentation by the court of this question to the jury. Subsequent to the rendition of the verdict, and upon consideration, the trial judge, as shown by the memorandum, reached the conclusion that the verdict of the defendant was contrary to the weight of evidence, and upon this ground granted the motion. In passing upon a motion of this character, it must be remembered that the trial judge has had the advantage of seeing the witnesses, hearing their testimony, noting their manner, and of becoming impressed with the weight to be attached to evidence offered, which it is impossible to have photographed upon the record on appeal; and in a case w'here he becomes impressed with the preponderance in favor of either side, or thinks that injustice has been done by the verdict, it is a proper exercise of the power vested in him to set aside such verdict. We are unable to see that the power thus vested in the trial judge has, in this instance, been abused.

But, apart from the ground upon which he placed his decision, we think that, there are other reasons, which are available upon appeal, though not referred to in the memorandum of the trial judge in granting the motion, which would have justified the disposition made. The most, we think, that could be claimed by the defendant upon this question of the known falsity of the certificate, is that, upon the evidence, it was a close one; and the effect of immaterial or incompetent evidence cannot be overlooked because it is difficult to determine what effect such testimony may have had on the minds of the jurors. Thus, in this case, against the objection and over the exception of the plaintiffs, considerable testimony was admitted tending to show that one of the plaintiffs, Ferguson, was cognizant of the steps leading up to the formation of the corporation; that he had knowledge of the way in which it was proposed to issue the stock, and of the slight value of the patent, in payment for which the entire capital stock of $100,000 was issued. That the plaintiffs, or either of them, aided or abetted in the plan by which the entire capital stock was issued for the letters patent, is not claimed; and, in the absence of such a contention or issue, we fail to see how their knowledge of what was done by the corporation, or of the value of the patent, can affect the question of whether or not the defendant knowingly signed the false certificate. We think that such evidence was both incompetent and immaterial, and no doubt tended to prejudice the plaintiffs with the jury. There are other rulings to which exceptions were taken by plaintiffs, equally good, but we think sufficient has been said to show that, where there are other reasons than those assigned by the trial judge for setting aside a verdict, these must be given due weight, upon an appeal such as this; the rule being that a right decision should stand, whether all the reasons be assigned or not. Marvin v. Insurance Co., 85 N. Y. 278, 284. The order should be affirmed, with costs and disbursements. All concur.